Required:

1. Prepare the consolidation entries.

2. Create and Complete the consolidation worksheet, using fomulas where applicable.

Issume, on January 1,2019 , a parent company acquired an 85% interest in its subsidiary. The total fair value of the controlling and noncontrolling interests was $625,000 over the book value of the subsidiary's Stockholders' Equity on the acquisition date. The parent assigned the excess to the following [A] assets: This acquisition resulted in no recognized goodwill. Assume the subsidiary sells inventory to the parent (upstream) which includes that inventory in products that it ultimately sells to customers outside of the controlled group. You have compiled the following data for the years ending 2021 and 2022: The inventory not remaining at the end of the year has been sold outside of the controlled group. The parent uses the equity method of pre-consolidation investment bookkeeping. The parent and the subsidiary report the following pre-consolidation financial statements at December 31,2022 : Issume, on January 1,2019 , a parent company acquired an 85% interest in its subsidiary. The total fair value of the controlling and noncontrolling interests was $625,000 over the book value of the subsidiary's Stockholders' Equity on the acquisition date. The parent assigned the excess to the following [A] assets: This acquisition resulted in no recognized goodwill. Assume the subsidiary sells inventory to the parent (upstream) which includes that inventory in products that it ultimately sells to customers outside of the controlled group. You have compiled the following data for the years ending 2021 and 2022: The inventory not remaining at the end of the year has been sold outside of the controlled group. The parent uses the equity method of pre-consolidation investment bookkeeping. The parent and the subsidiary report the following pre-consolidation financial statements at December 31,2022